The 27th Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Summit 2020 was hosted virtually by Malaysia from Kuala Lumpur on November 20, 2020. It was chaired by Malaysia’s prime minister, Muhyiddin bin Haji Muhammad Yassin, under the 2020 APEC Malaysia theme of ‘Optimising Human Potential towards a Resilient Future of Shared Prosperity. Pivot. Priorities. Progress.’ 21 nations of the APEC account for 60 per cent of global GDP.
In 2018, the APEC countries failed to reach agreement due to trade and investment tensions between the US and China, and the 2019 annual summit in Chile was cancelled because of violent domestic protests in that country.
In this context, the 2020 summit had a special importance. The 27th APEC summit saw the release of the Asia Pacific leaders’ first joint communique in three years, calling for free and predictable trade to help a global economy slowed down due to the coronavirus pandemic. The leaders also pledged to refrain from backtracking and restoring to protectionist measures and to keep markets and borders open.
The 2020 Kuala Lumpur Declaration
The APEC leaders expressed their determination to work unitedly in overcoming the challenges of the economic slowdown in the region due to the COVID-19 pandemic while giving priority to save people’s lives and improving health conditions.
The leaders called for the alignment of APEC efforts towards (i) improving the narrative of trade and investment; (ii) inclusive economic participation through digital economy and technology; and (iii) driving innovative sustainability.
The leaders decided to use all available policy tools for inclusive, effective, and sustained response to COVID-19. In this direction, it was agreed to enhance stimulus measures to help speed up economic recovery and job creation. The importance of improvement of fiscal sustainability and transparency in order to meet the demands of a long-term, stable economic growth, while meeting the future financing needs, was emphasised.
The leaders reaffirmed their support for agreed-upon rules of the World Trade Organisation (WTO) in promoting the stability and predictability of international trade flows, ensuring a free, open, fair, non-discriminatory, and transparent trade and investment environment to drive economic recovery. They agreed to advance the economic integration of the region in a market-driven manner, including through free trade area of the Asia Pacific (FTAAP), agenda. Regional interconnectivity would be improved.
The leaders reaffirmed the need to cooperate constructively on COVID-19, including research and development, production, manufacturing, and distribution of diagnostic tests, essential medical products and services, therapeutics and vaccines.
The joint declaration highlighted the importance of facilitating equitable access to safe, effective, and affordable vaccines as well as other medical countermeasures vital to safeguard people’s health and well-being, while incentivising innovation.
The leaders agreed to foster an enabling environment for the development of the digital economy, including opening new opportunities for micro, small and medium enterprises as well as women and others with untapped economic potential. Emphasis was placed on narrowing down the existing digital skills and regulatory gaps by encouraging development in digital infrastructure and transformation.
The leaders agreed to work for ensuring food security and facilitating access to affordable energy, to all the people of the region.
The APEC economies also declared to promote economic policies and growth that support global efforts to tackle climate change, extreme weather and natural disasters, and strengthen emergency preparedness in order to establish a sustainable atmosphere.
The members expressed their support for the implementation of the La Serena Roadmap for ‘Women and Inclusive Growth’ which was identified as a priority by Chile in 2019. This move will drive greater inclusive economic development and participation of women in the Asia-Pacific region.
APEC Putsrajaya Vision 2040 APEC leaders officially endorsed the APEC Putrajaya Vision 2040, primarily charting the future of the region. It envisages “an open, dynamic, resilient, and peaceful Asia-pacific community by 2040” so that people may prospen. The 2021 summit would be considering an implementation plan for the vision. The Bogor goals were reviewed and appreciated. (Bogor is the Indonesian town, where APEC leaders in 1994 agreed for free and open trade and investment.)
The leaders decided New Zealand to host the next summit in 2021 during its APEC Chairmanship.
Analysis
In the present scenario, APEC has to face a huge challenge in implementing its basic goals like free trade and economic inclusion due to the ongoing trade war between the USA and China. However, the US President Donald Trump participated in the 2020 virtual summit for the first time since 2017. It has been the policy of China to counter American protectionism trade policy and urge the member nations to “defend multilateralism” and establish an “Asia-Pacific free trade zone at an early date”. China favours friendly countries of the USA but excludes the US from all kinds of trade agreements. On the other side, Trump’s ‘America First’ policy has alienated the trading partners.
The Asia-Pacific Economic Cooperation (APEC)
The Asia-Pacific Economic Cooperation (APEC), a regional economic forum, was established in 1989. The primary goal of the forum is to leverage the growing interdependence of the Asia-Pacific. The 21 member nations of APEC aim to create greater prosperity for the people of the region by promoting balanced, inclusive, sustainable, innovative, and secure growth and by accelerating regional economic integration.
The idea of APEC was conceived by the former Prime Minister of Australia, Bob Hawke, during a speech in Seoul, Korea, on January 31, 1989. Later in the same year 12 Asia-Pacific economies met in Canberra, Australia, to establish APEC. The founding members were Australia, Brunei Darussalam, Canada, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and the United States. In 1991, the People’s Republic of China, Hong Kong, (China) and Chinese Taipei joined. Mexico and Papua New Guinea joined in 1993 and Chile in 1994. In 1998, Peru, the Russian Federation, and Vietnam joined, taking the membership to 21.
Between 1989 and 1992, APEC met as an informal dialogue of senior officials and ministers. In 1993, former US president, Bill Clinton, established the practice of an annual APEC Economic Leaders’ Meeting to provide greater strategic vision and direction for cooperation in the region.
APEC’s cooperative process is predominantly concerned with trade and economic issues, with members engaging with one another as economic entities. It ensures that goods, services, investment, and people move easily across borders. The trade is facilitated through faster customs procedures at borders; more favourable business climates behind the border; and aligning regulations and standards across the region. The initiatives of APEC to synchronise regulatory systems is a key step towards integrating the Asia-Pacific economy. A product can be more easily exported with just one set of common standards across all economies.